Court slams investor in Okatie 'straw man' loan

COLUMBIA -- A New York investor had plenty of chances to speak up about red flags in his loan application, but didn’t, said the South Carolina Supreme Court.

It was only afterward, when then-26-year-old Alphonse Stalliard saw that the Okatie residence for which he had received the loan wouldn’t sell, that he raised objections.

On Wednesday, the high court ruled against his appeal stemming from attempts by Savannah Bank to foreclose on the property. Events have since overtaken the legal scuffle, and the property, 10 Indigo Plantation Rd. in Okatie’s Oldfield Plantation, has changed hands.

The man had argued that he shouldn’t be held liable for a loan closed by a person acting on his behalf under a power of attorney. He also said the bank didn’t do its job when it granted him a loan.

Stalliard’s original plan, according to court records, was to “build a house, sell a house, make a profit." His troubles started when he linked up with a man named Steve Corba, who told him about Hilton Head Island’s real estate opportunities, wrote the court.

“Through Corba, (he) hired Sally Gardocki, an attorney in Hilton Head, and gave her a power of attorney to obtain financing,” wrote the court. Stalliard later claimed that Gardocki overstepped her authority.

But Wednesday’s decision says he admitted she sent him the loan documents, and he looked them over without objecting to anything.

Stalliard had wanted more time to go over the evidence during the discovery stage when parties trade findings and interview witnesses before trial. But the master-in-equity said no and ruled in favor of the bank, which halted the case before it could go to trial.

Wednesday’s high court decision affirmed that.

Stalliard was a resident of New Jersey in 2007 when his name, social security number and credit profile were used by a third party to secure a loan for $1.6 million for purchase and construction work on the property.

In 2010, the property was sold to the bank in a foreclosure sale for $650,000.

A Realtor.com lists it as 4,700 square feet with five bedrooms and six bathrooms, on 0.4 acres.

The deal was a “straw man loan,” and court documents say it wasn’t the first instance of such dealings in Beaufort County. At least one person involved in Stalliard’s situation has pled guilty to federal loan fraud, and another was said to be facing indictment in New Jersey, according to records.

Stalliard said the bank failed to verify his ability to pay, while reviewing what was a false loan application. But in 2008, he had executed a loan modification. Soon afterward, he defaulted on it.

In transcripts of a cross examination, he was asked whether anyone at Harbourside Bank, an agent of Savannah Bank, had contacted him to find out if he had worked at Lehman Brothers for 10 years. He said no, and that he would have been only 17 during time loan documents said he worked at Lehman.

Stalliard said he was living in the Virgin Islands when he was 17 and moved to the mainland U.S. in 2005. He said loan documents listed his monthly salary as $35,000. But he said he made less than $100,000 per year.